Ongoing industrial action in relation to the enterprise agreements at three distribution centres in Victoria and one distribution centre in NSW has disrupted Woolworths’ supply chain and cost the retailer around $50 million to date.
Providing an update on the supply chain industrial action yesterday, Woolworths Group said some supermarkets in Victoria, ACT and NSW are experiencing stock flow limitations on some lines, impacting product availability of ambient, chilled and freezer lines for customers.
“We sincerely apologise to all of our customers for the inconvenience caused by the inconsistency of supply across some product lines in some of our store,” said Woolworths Group CEO, Amanda Bardwell.
“We are working hard to try and improve the situation and would like to thank our customers for their understanding and for treating our teams with respect.”
Until the industrial action is resolved, a further impact to sales is expected. The full financial impact will be dependent on the duration and extent of the ongoing industrial action across the affected sites, and the time taken to rebuild inventory ahead of the Christmas trading period.
Negotiations unresolved
Woolworths Group has been engaging in good faith in negotiations with the United Workers Union (UWU) for over four months. The UWU commenced indefinite strike action at the four sites on 21 November, with the strike action ongoing at the time of writing.
The UWU is seeking pay increases at these sites in excess of 25% over three years, and is also demanding there be ‘no enforceable performance standard or rate’.
While each site is negotiating its own separate enterprise agreement (EA), Woolworths Group has put forward several offers, the latest of which would take hourly rates at these sites to approximately 40% above the award.
The Shop, Distributive and Allied Employees’ Association (SDA), which also represents a number of the team members at the affected sites, has recently endorsed an offer by Woolworths Group to resolve the EA negotiations at one of the affected sites, the Melbourne South Regional DC (MSRDC).
Following that endorsement, Woolworths Group has made extensive enquiries of the team members at the MSRDC and a majority has expressed their desire to return to work. However, Woolworths Group has been unable to re-open the site due to UWU picketing the site and refusing to give any assurance of safe passage for those team members who wish to work.
To minimise the customer impact from this industrial action, Woolworths Group has deployed a range of contingency plans including building inventory at stores, leveraging the wider distribution network and some suppliers delivering direct to stores.
Safety and wellbeing considerations
The Australian Retailers Association (ARA) is urging the UWU to consider the safety and wellbeing of staff, shoppers and the community amid the ongoing industrial action.
ARA Chief Industry Affairs Officer Fleur Brown said while industrial action is a fundamental right, there is a fair balance to be struck to protect employees and customers.
“Everyone has the right to feel safe at work, and industrial action should not impede on workers wishing to carry out their everyday duties,” she said.
“If an employee wishes to return to work, they should be able to do so without fear of retribution.
Ms Brown also said that Australians need access to vital food and grocery products particularly in the lead-up to Christmas.
“This is the busiest period for retailers and shoppers which places great demand on the supply of these products with a flow-on effect to many Australians.
“Retailers are major employers and significant contributors to the economy. Protracted incidents such as this have significant financial repercussions for the broader economy, impacting all Australians.”